“By converging emerging technologies, aerospace and defense manufacturers can achieve exponential growth. Each technology has its own linear growth path, but by converging technologies, such as Blockchain and 3D printing, we can create new business models and ways of doing business. That is what makes exponential growth possible,” according to James A. Regenor, Business Unit Director, Transformative Technologies, Moog Aircraft Group.

Regenor is a speaker at the marcus evans Aerospace & Defense Manufacturing & R&D Summit 2018, taking place in California, March 1-2.

What potential is there for exponential growth in the aerospace manufacturing industry?

Typically, we did business in a linear fashion, bidding for programs ten years in advance, but we realized that by leveraging Blockchain and 3D printing, we could create a new point of use, time of need digital supply that would be more agile and allow us to rapidly introduce new technologies. With the dynamic changes that allows, we can shape the marketplace and react much quicker as programs come up.

What have you achieved by bringing together 3D printing, Blockchain and platform-based business technologies? What advice do you have for other executives in the industry?

At Moog, we have merged platform-based businesses into a new concept with Blockchain. As the aerospace industry is highly regulated, some people say we cannot have a platform-based model, but I believe we can as long as regulatory requirements are satisfactorily addressed. In order to address the regulatory requirements, we needed to define and create the unit of value on the platform. We did this by merging the 3D part build file with Blockchain provenance. This then allowed us to comply with the regulatory requirements.

In our case, every part we ship needs paper provenance. With Blockchain, we are creating provenance in a digital ledger format, and selling digital parts instead of physical parts. Our clients can convert the data to a physical part where and when needed. That changes everything.

As far as what lessons we could extract, executives need to understand that innovation requires not just a technical innovation but often times also a new business model for maximum results. Companies need business folks on the innovation team looking at technologies and exploring new business models. Moog is creating an environment that is like Netflix or Amazon for aircraft parts. The platform allows sub-tiers access to capabilities they could not access before because they were not affordable, as well as access to buyers. Manufacturing executives must explore that depth of customer reach, how deep they want to go into the supply chain and if they are willing to be cloud-based to be affordable. Innovation at Moog is defined as increasing value for our customer.

How does Blockchain relieve cost pressures? What do manufacturers need to know?

There are many non-value added costs in the industrial world. Once a product leaves our loading dock until it reaches the customer, it needs to get picked up, packaged, shipped and stored en route. It might also go through a customs brokerage. These costs put pressure on our margin and they get passed on to customers. With Blockchain we get rid of these costs, while our clients mitigate long lead times and ensure a reliable source of supply. They can print the part on a 3D printer where and when they need it.

As 3D printing technology improves, companies will be able to counterfeit very complex parts. Blockchain technology allows us to mitigate counterfeit production. Each part we produce has a unique hash or serial number, and an embedded watermark, so once the serial number is active in the network, it will not accept another part with the same information. We use a phone scanner to identify if the part is valid. We can also trace the part throughout its lifecycle, and track its physical location. Blockchain allows us to ensure data, process and performance integrity.